• News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
BW Businessworld

Climate Challenge: India Needs Efficient Air Conditioners

India needs to balance out its cooling needs and potential emissions. Large air conditioner businesses in India thus need to adopt cleaner technology and massive research to improve the cooling parameters for increased efficiency of air conditioners while also ensuring that prices remain muted.

Photo Credit :


According to Bill Gates, fifty-one billion is how many tons of greenhouse gases the world typically adds to the atmosphere every year, and zero is what we need to aim for. Out of the many things he professes in his book, one of the main causes for such a climate disaster is the increased use of air conditioners. Once considered as a luxury, ACs are now perceived as an essential appliance even in the middle and low-income families across India. 

As a result of warmer summers, and identification of affluence and position in society, having an air conditioner in home has become a status symbol. In 1991, when the economy opened up and opportunities for the lower middle class and middle class exploded, indulgence on white goods like air conditioners and refrigerators became the norm thereby leading to overall rise of carbon footprints and increased incidences of heat waves across India. 

Before 1991, air conditioning and refrigeration, was very rare in India and was only confined to big metropolitan cities. However, with increased per capita income and soaring middle classes air conditioner purchase consumption is now on a double-digit growth. 

Sudhir MishraThe Indian AC industry is sized at Rs 180–200 billion. According to Tech Scientific data, it is projected to grow at a Compound Annual Growth Rate (CAGR) of more than 17%, by 2023. In our country, Air Conditioners are no longer a status symbol since its availability has now percolated to lower middle classes and even lower classes across the country even in smaller cities and villages. However, with India being at the brink of a climate emergency the doubling of AC efficiency on energy parameters is the need of the hour. 

But how do we know whether an Air Conditioner is eco-friendly or not? This depends on the refrigerant used in the unit of the Air Conditioner. Recently, R-32 also known as a ‘green refrigerant’ has received a lot of interest since it is said to reduce electricity consumption and at the same time is more climate-friendly than the potent greenhouse gases traditionally used. R-32 has a global warming potential (GWP) that is one-third lower and is remarkable for its low environmental impact. 

Simran GuptaThis breakthrough innovation is the result of the Global Cooling Prize, which was initiated by a credible Government Institute where the winning teams are two prominent multinational air conditioner companies of the world which were able to slash the electricity usage by more than 75% as compared to standard AC products and at the same time reduce the climate change impact by 80%. 

Considering the position in India, leading manufacturers like Voltas, Daikin India, LG, Bluestar etc are trying to incorporate similar climate change reduction refrigerants by increasing efficiency and at the same time reducing electricity consumption in line with the Indian Cooling Action Plan (ICAP) of 2019. According to Motilal Oswal research study, India’s AC industry is highly competitive, with 35–40 brands playing the penetration story in India. The Top 6 players enjoy about 75–80% market share. Voltas India having its highest market share of 21%, recently launched its Air cooler campaign ‘Ab garmi ke mazey lo, bina garmi ke.’ in line with its moto of ‘Keeping India cool’ since 1954. s

Further, to reduce the climate change impact, the temperature at which the AC is set is important. This is because according to a study, every 1°C increase in AC set-point temperature can lead to additional 6% energy savings. Accordingly, amid the covid-19, it was suggested that the AC temperature in public spaces like malls and office, including households be set above 25-degree Celsius essentially.

There is however anissue with AC purchase in India. Energy efficiency does not feature as a priority in the purchase of cooling appliances by Indian Household. Cost remains the key barrier to purchasing high-efficiency air conditioners according to recent studies by the Council on Energy, Environment and Water (CEEW). It was founded that 93 per cent households in tier II cities of India, that are aware of the star labelling programme, find it useful. However, only 14 per cent purchases a 4- or 5-star AC. Over 75 per cent households attributed the cost of the AC as a barrier to purchasing a high star AC.

The India Cooling Action Plan (ICAP) projects the number of room air conditioners to become about four times in the next 10 years, and about 10 times in the next 20 years, making India the world’s largest energy user for cooling which is not a great news. However, there is an issue that if energy efficiency is not taken into consideration, it will ruin India’s mitigation efforts. Indian cooling is thus at the forefront of India’s adaptation to climate change. However, if the needs are met with inefficient ACs, it could be the bane of India’s mitigation efforts. Hence, India needs to balance out its cooling needs and potential emissions. Large air conditioner businesses in India thus need to adopt cleaner technology and massive research to improve the cooling parameters for increased efficiency of air conditioners while also ensuring that prices remain muted.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Sudhir Mishra

The author is Founder and Managing Partner, Trust Legal.

More From The Author >>

Simran Gupta

Associate, Trust Legal

More From The Author >>